Monday 5 March 2012

TDS: Extended time limit in s. 201(3) Proviso does not save proceedings initiated before 1.4.2010 even if order passed after that date

ACIT vs. M/s. Catholic Relief Services (ITAT Delhi)


Pursuant to a search conducted on 11.09.2007, the AO passed an order dated 27.4.2010 u/s 201(1) / 201(1A) for FYs 2002-03, 2003-04 and 2004-05 in respect of TDS on salary & perquisites of expatriate employees. The assessee relied on NHK Japan Broadcasting Corp 172 TM 230 & Hutchison Essar Telecom Ltd 323 ITR 230 (Del) & argued that as the order was passed after 4 years from the end of the FY, it was barred by limitation. The AO relied on the Proviso to s. 201(3) inserted by the FA 2009 w.e.f. 1.4.2010 which provides that an order for a financial year commencing on or before 1.4.2007 may be passed at any time on or before 31.3.2011. The CIT (A) allowed the appeal on the ground that one had to see the law as of the date of initiation of proceedings and held that the order was beyond limitation. On appeal by the department, HELD dismissing the appeal:

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